1
EXHIBIT 2(B)
FORM OF WARRANT
2(b)-1
2
SERIES _______ WARRANT CERTIFICATE
LASERMEDIA COMMUNICATIONS CORP.
Series _____ Warrant to Subscribe for
_______________ Common Shares
THIS CERTIFIES that, for value received,
________________________________, (the "WARRANTHOLDER"), is the registered
holder of __________ warrants (the "WARRANTS") which entitle the holder, subject
to the terms and conditions set forth in this Warrant Certificate, to purchase
from Lasermedia Communications Corp. (the "COMPANY") in exchange for each
Warrant, one common share of the Company (the "SHARE") at a price of $__________
per Share (the "EXERCISE PRICE") at any time up to 5:00 p.m., Toronto time, on
March 31, 2002 the ("TIME OF EXPIRY"). The number of Shares which the
Warrantholder is entitled to acquire upon exercise of the Warrantholder's
Warrants are subject to adjustment as hereinafter provided.
1. EXERCISE OF WARRANTS.
(a) ELECTION TO PURCHASE. The rights evidenced by this
certificate may be exercised by the Warrantholder in whole or in part
and in accordance with the provisions hereof by delivery of a
Subscription Form in substantially the form attached hereto as Schedule
"A", properly completed and executed for the number of Shares specified
in the Subscription Form at the principal office of the Company at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention:
President or such other address in Canada as may be notified in writing
by the Company (the "COMPANY OFFICE"). In the event that the rights
evidenced by this certificate are exercised in part, the Company shall,
contemporaneously with the issuance of the Shares issuable on the
exercise of the Warrants so exercised, issue to the Warrantholder a
Warrant Certificate, dated as of the date thereof, on identical terms
in respect of that number of Shares in respect of which the
Warrantholder has not exercised the rights evidenced by this
certificate.
(b) EXERCISE. The Company shall, on the date it receives a
duly executed Subscription Form and the Exercise Price for the number
of Shares specified in the executed Subscription Form (the "EXERCISE
DATE"), issue that number of Shares specified in executed Subscription
Form. The Shares shall be issued as fully paid and non-assessable
common shares in the capital of the Company.
(c) SHARE CERTIFICATES. As promptly as practicable after the
Exercise Date, the Company shall issue and deliver to the
Warrantholder, registered in such name or names as the Warrantholder
may direct or if no such direction has been given, in the name of the
Warrantholder, a certificate or certificates for the number of Shares
specified in the Subscription Form. To the extent permitted by law,
such exercise shall be deemed to have been effected as of the close of
business on the Exercise Date, and at such time the rights
2(b)-2
3
of the Warrantholder with respect to the number of Warrants which have
been exercised as such shall cease, and the person or persons in whose
name or names any certificate or certificates for Shares shall then be
issuable upon such exercise shall be deemed to have become the holder
or holders of record of the Shares represented thereby.
(d) FRACTIONAL SHARES. No fractional Shares shall be issued
upon exercise of any Warrants and no payments or adjustments shall be
made upon any exercise on account of any cash dividends on the Shares
issued upon such exercise. If any fractional interest in the Shares
would, except for the provisions of the first sentence of this Section
l(d), be deliverable upon the exercise of a Warrant, the Company shall,
in lieu of delivering the fractional share therefor' pay to the
Warrantholder an amount in cash equal to the Fair Market Value (as
hereinafter defined) of such fractional interest.
(e) CORPORATE CHANGES.
(i) Subject to paragraph 1(e)(ii) hereof, if the
Company shall be a party to any reorganization, merger,
dissolution or sale of all or substantially all of its assets,
whether or not the Company is the surviving entity, the number
of Warrants evidenced by this Certificate shall be adjusted so
as to apply to the securities to which the holder of that
number of Shares of the Company subject to the unexercised
Warrants would have been entitled by reason of such
reorganization, merger, dissolution or sale of all or
substantially all of its assets (the "EVENT"), and the
Exercise Price shall be adjusted to be the amount determined
by multiplying the Exercise Price in effect immediately prior
to the Event by the number of Shares subject to the
unexercised Warrants immediately prior to the change or
reclassification, and dividing the product thereof by the
number of Shares to which the holder of that number of Shares
subject to the unexercised Warrants would have been entitled
to by reason of such Event.
(ii) If the Company is unable to deliver Shares to
the Warrantholder pursuant to the proper exercise of a
Warrant, the Company may satisfy such obligations to the
Warrantholder hereunder by paying to the Warrantholder in cash
the difference between the Exercise Price of all unexercised
Warrants granted hereunder and the Fair Market Value of the
Shares to which the Warrantholder would be entitled to upon
exercise of all unexercised Warrants. Adjustments under this
subparagraph (e) or (subject to subparagraph (n)) any
determinations as to the fair Market Value of any Shares shall
be made by the board of directors of the Company, or any
committee thereof specifically designated by the board of
directors to be responsible therefor, and any reasonable
determination made by such board or committee thereof shall be
binding and conclusive, subject only to any disputes being
resolved by the Company's auditors, whose determination shall
be binding and conclusive.
2(b)-3
4
(f) SUBDIVISION OR CONSOLIDATION OF SHARES.
(i) In the event the Company shall subdivide its
outstanding common shares into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the
outstanding common shares of the Company shall be consolidated
into a smaller number of shares, the Exercise Price in effect
immediately prior to such consolidation shall be
proportionately increased.
(ii) Upon each adjustment of the Exercise Price as
provided in paragraph 1(f)(i) above, the Warrantholder shall
thereafter be entitled to acquire, at the Exercise Price
resulting from such adjustment, the number of Shares
(calculated to the nearest tenth of a Share) obtained by
multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of Shares which may be acquired
hereunder immediately prior to such adjustment and dividing
the product thereof by the Exercise Price resulting from such
adjustment.
(g) CHANGE OR RECLASSIFICATION OF SHARES. In the event the
Company shall change or reclassify its outstanding common shares into a
different class of securities, the rights evidenced by the Warrants
shall be adjusted as follows so as to apply to the successor class of
securities:
(i) the number of the successor class of securities
which the Warrantholder shall be entitled to acquire shall be
that number of the successor class of securities which a
holder of that number of Shares subject to the unexercised
Warrants immediately prior to the change or reclassification
would have been entitled to by reason of such change or
reclassification; and
(ii) the Exercise Price shall be determined by
multiplying the Exercise Price in effect immediately prior to
the change or reclassification by the number of Shares subject
to the unexercised Warrants immediately prior to the change or
reclassification, and dividing the product thereof by the
number of Shares determined in paragraph 1(g)(i) hereof.
(h) OFFERING TO SHAREHOLDERS. If and whenever at any time
prior to the Time of Expiry, the Company shall fix a record date or if
a date of entitlement to receive is otherwise established any such date
being hereinafter referred to in this paragraph 1(h) as the "record
date") for the issuance of rights, options or warrants to all or
substantially all the holders of the outstanding common shares of the
Company entitling them, for a period which shall not expire not more
than 45 days after such record date, to subscribe for or purchase
common shares of the Company or securities convertible into or
exchangeable for common shares of the Company at a price per share or,
as the case may be, having a
2(b)-4
5
conversion or exchange price per share less than 95% of the Fair Market
Value (as hereinafter defined) on such record date, the Exercise Price
shall be adjusted immediately after such record date so that it shall
equal the price determined by multiplying the Exercise Price in effect
on such record date by a fraction of which the numerator shall be the
total number of common shares outstanding on such record date plus a
number equal to the number arrived at by dividing the aggregate
subscription or purchase price of the total number of additional common
shares offered for subscription or purchase or, as the case may be, the
aggregate conversion or exchange price of the convertible or
exchangeable securities so offered by the Fair Market Value, and of
which the denominator shall be the total number of common shares
outstanding on such record date plus the total number of additional
common shares so offered (or into which the convertible or exchangeable
securities so offered are convertible or exchangeable), common shares
owned by or held for the account of the Company shall be deemed not to
be outstanding for the purpose of any such computation; such adjustment
shall be made successively whenever such a record date is fixed; to the
extent that any rights or warrants are not so issued or any such rights
or warrants are not exercised prior to the expiration thereof, the
Exercise Price shall then be readjusted to the Exercise Price which
would then be in effect if such record date had not been fixed or to
the Exercise Price which would then be in effect based upon the number
of common shares or conversion or exchange rights contained in
convertible or exchangeable securities actually issued upon the
exercise of such rights or warrants, as the case may be.
(i) CARRY OVER OF ADJUSTMENTS. No adjustment of the Exercise
Price shall be made if the amount of such adjustment shall be less than
1% of the Exercise Price in effect immediately prior to the event
giving rise to the adjustment, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to at least 1% of the Exercise Price.
(j) NOTICE OF ADJUSTMENT. Upon any adjustment of the number of
Shares and upon any adjustment of the Exercise Price, then and in each
such case the Company shall give 10 days' prior written notice thereof
to the Warrantholder, which notice shall state the Exercise Price and
the number of Shares or other securities subject to the unexercised
Warrants resulting from such adjustment, and shall set forth in
reasonable detail the method of calculation and the facts upon which
such calculation is based. Upon the request of the Warrantholder there
shall be transmitted promptly to the Warrantholder a statement of the
firm of independent chartered accountants retained to audit the
financial statements of the Company to the effect that such firm
concurs in the Company's calculation of the change.
2(b)-5
6
(k) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon its
common shares payable in Shares;
(ii) the Company shall offer for subscription pro
rata to the holders of its common shares any additional shares
of any class or other rights;
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or
consolidation, amalgamation or merger of the Company with, or
sale of all or substantially all of its assets to, another
corporation; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company,
then, in any one or more of such cases, the Company shall give to the
Warrantholder (A) at least 10 days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in respect of any
such reorganization, reclassification, consolidation, merger,
amalgamation, sale, dissolution, liquidation or winding-up and (B) in
the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, at least 10 days'
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (A) shall also specify,
in the case of any such dividend, distribution or subscription rights,
the date on which the holders of common shares shall be entitled
thereto, and such notice in accordance with the foregoing clause (B)
shall also specify the date on which the holders of common shares shall
be entitled to exchange their common shares for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, amalgamation, sale, dissolution, liquidation, or
winding-up, as the case may be.
(l) SHARES TO BE RESERVED. The Company will at all times keep
available, and reserve if necessary under Canadian laws, out of its
authorized common shares, solely for the purpose of issue upon the
exercise of the Warrants, such number of Shares as shall then be
issuable upon the exercise of the Warrants. The Company covenants and
agrees that all Shares which shall be so issuable will, upon issuance,
be duly authorized and issued as fully paid and non-assessable. The
Company will take all such actions as may be necessary to ensure that
all such Shares may be so issued without violation of any applicable
requirements of any exchange upon which the common shares of the
Company may be listed or in respect of which the common shares are
qualified for unlisted trading privileges. The Company will take all
such actions as are within its power to ensure that all such Shares may
be so issued without violation of any applicable law.
2(b)-6
7
(m) ISSUE TAX. The issuance of certificates for Shares upon
the exercise of Warrants shall be made without charge to the
Warrantholder for any issuance tax in respect thereto, provided that
the Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the Warrantholder.
(n) FAIR MARKET VALUE. For the purposes of any computation
hereunder, the "Fair Market Value" at any date shall be the weighted
average sale price per share for the common shares of the Company for
20 consecutive trading days immediately before such date on any
exchange upon which the common shares of the Company may be listed or
in respect of which the common shares are qualified for unlisted
trading privileges, or if the shares in respect of which a
determination of Fair Market Value is being made are not listed on any
stock exchange or qualified for unlisted trading privileges, the Fair
Market Value shall be determined by the directors, which determination
shall be conclusive. The weighted average price shall be determined by
dividing the aggregate sale price of all such shares sold on the said
exchange during the said 20 consecutive trading days by the total
number of such shares so sold.
2. REPLACEMENT. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant Certificate and, if
requested by the Company, upon delivery of a bond of indemnity satisfactory to
the Company (or, in the case of mutilation upon surrender of this Warrant
Certificate), the Company will issued to the Warrantholder a replacement
certificate (containing the same terms and conditions as this Warrant
Certificate.
3. EXPIRY DATE. The Warrants shall expire and all rights to purchase
Shares hereunder shall cease and become null and void at 5:00 p.m. Toronto time
on the Time of Expiry.
4. INABILITY TO DELIVER SHARES. If for any reason, other than the
failure or default of the Warrantholder, the Company is unable to issue and
deliver the Shares or other securities as contemplated herein to the
Warrantholder upon the proper exercise by the Warrantholder of the right to
purchase any of the Shares covered by this Warrant Certificate, the Company may
pay, at its option and in complete satisfaction of its obligations hereunder, to
the Warrantholder, in case, an amount equal to the difference between the
Exercise Price and the Fair Market Value of such Shares or other securities on
the Exercise Date.
5. GOVERNING LAW. The laws of the Province of Ontario and the laws of
Canada applicable therein shall govern the Warrants.
6. SUCCESSORS. This Warrant Certificate shall enure to the benefit of
and shall be binding upon the Warrantholder and the Company and their respective
successors and assigns.
2(b)-7
8
IN WITNESS WHEREOF the Company has caused this warrant Certificate to
be signed by its duly authorized officers and its corporate seal affixed hereto.
DATED as of _______________________, 1997.
LASERMEDIA COMMUNICATIONS
CORP.
Per:
-----------------------------------
2(b)-8
9
SCHEDULE A
SUBSCRIPTION FORM
TO: LASERMEDIA COMMUNICATIONS CORP. (the "COMPANY")
The undersigned holder (the "HOLDER") of the attached Warrant hereby
subscribes for Common Shares (the "COMMON SHARES") of Lasermedia Communications
Corp. (the "COMPANY") (or such number of Common Shares and/or other securities
and/or property to which such subscription entitles the Holder in lieu thereof
or addition thereto under the provisions of the Warrant) pursuant to the terms
of the Warrant at the Exercise Price (as defined in the Warrant) per share on
the terms specified in the Warrant and encloses herewith cash or a bank draft,
certified cheque or money order payable to the order of the Company in payment
therefor.
The undersigned irrevocably hereby directs that the Common Shares be
issued and delivered as follows:
DATED this day of , 199__.
-----------------------------------
(Signature)
-----------------------------------
(Name - please print)
-----------------------------------
(Address)
-----------------------------------
(Social Insurance Number if an individual)
2(b)-9
